Amendment 4 looms large

Property taxes a big issue

Published: Friday, November 2, 2012 at 6:19 p.m.

Last Modified: Friday, November 2, 2012 at 6:19 p.m.

Since riding high in the housing-driven boom five years ago, Marion County’s property tax revenues have plummeted by roughly a third.

When land values hit their peak, property owners countywide in 2008 paid $78.3 million in taxes. For 2013, property tax revenues are projected at $54.3 million — a drop of $24 million or 31 percent.

The decline — and the County Commission’s opposition to tax hikes — has cost workers their jobs, frozen salaries for staffers and led local governments to defer or cancel projects.

More of the same might be in order if the proposed Amendment 4 passes on Tuesday.

If adopted, Amendment 4 blocks increases in assessed values of homestead properties if the market value of those properties decreases; halves the cap on assessment hikes to non-homestead or commercial properties from 10 percent annually to 5 percent; and creates a new, temporary homestead exemption for first-time homebuyers that amounts to 50 percent of the home’s value, capped at the county’s median value for homes.

Property Appraiser Villie Smith’s office estimates that property tax revenues would dip another $1.5 million next year if Amendment 4 passes.

And history suggests the measure will pass.

Including the landmark “Save Our Homes” amendment that passed in 1992, Florida voters have considered a dozen state constitutional changes affecting property taxes.

All but one passed.

The lone exception was a 1998 measure that would have established a tax exemption for lands placed into conservation.

That failed with 49.8 percent of the vote.

The 11 that did pass did so with an average support of 67 percent.

All constitutional amendments on this year’s ballot must get at least 60 percent of the vote to pass.

While some local governments have adopted resolutions in opposition to Amendment 4, the County Commission, which approves the budgets for all county agencies, is waiting to see what happens.

“That amendment, if it passes, will not affect this year’s budget,” said County Commissioner Kathy Bryant, the board’s vice chairwoman. It “is something we’ll discuss at our strategic planning workshop in January and again at our budget workshops in July.”

Realtors and other advocates maintain that Amendment 4 would boost the state’s real estate market and spur the economy.

Besides offering new homebuyers a “healthy” tax break, the Florida Association of Realtors maintains in its policy statement that the amendment would also protect businesses and homeowners from “unfair and unexpected” tax hikes by ending the “gimmick” known as the recapture rule.

That was the cap set on property taxes under Save Our Homes and mandated that property taxes could be increased up to 3 percent even as property values fell. The tax increase stops when market values align with assessed values.

In its analysis, the nonpartisan budget watchdog group Florida TaxWatch estimated that adopting Amendment 4 would over the next decade create nearly 20,000 jobs, expand the state’s economy by about $1.1 billion, boost personal income by more than $5.3 billion, and generate between 320,000 and 384,000 additional home sales.

On the other hand, TaxWatch warned of unintended consequences.

“Local governments could also increase other revenue sources,” the group’s report noted.

“The magnitude of the reduction in taxable value brought about by the amendment will surely place upward pressure on millage rates, so those not benefiting from the amendment will likely see higher taxes in the future than they would have otherwise.”

TaxWatch further noted that local governments that do not increase property tax rates to make up for the lost revenue would likely cut other programs.

Taxpayers statewide could reap an estimated $2 billion in savings over the next four years if Amendment 4 is implemented, the Florida Association of Counties reports.

Yet the group estimates that longtime homeowners will be forced to pick up the slack, either through higher taxes or reduced services, created by a “back-door bailout” that mostly benefits owners of vacation homes, out-of-state winter residents and high-powered developers.

<p>Since riding high in the housing-driven boom five years ago, Marion County's property tax revenues have plummeted by roughly a third.</p><p>When land values hit their peak, property owners countywide in 2008 paid $78.3 million in taxes. For 2013, property tax revenues are projected at $54.3 million — a drop of $24 million or 31 percent.</p><p>The decline — and the County Commission's opposition to tax hikes — has cost workers their jobs, frozen salaries for staffers and led local governments to defer or cancel projects.</p><p>More of the same might be in order if the proposed Amendment 4 passes on Tuesday.</p><p>If adopted, Amendment 4 blocks increases in assessed values of homestead properties if the market value of those properties decreases; halves the cap on assessment hikes to non-homestead or commercial properties from 10 percent annually to 5 percent; and creates a new, temporary homestead exemption for first-time homebuyers that amounts to 50 percent of the home's value, capped at the county's median value for homes.</p><p>Property Appraiser Villie Smith's office estimates that property tax revenues would dip another $1.5 million next year if Amendment 4 passes.</p><p>And history suggests the measure will pass.</p><p>Including the landmark “Save Our Homes” amendment that passed in 1992, Florida voters have considered a dozen state constitutional changes affecting property taxes.</p><p>All but one passed.</p><p>The lone exception was a 1998 measure that would have established a tax exemption for lands placed into conservation.</p><p>That failed with 49.8 percent of the vote.</p><p>The 11 that did pass did so with an average support of 67 percent.</p><p>All constitutional amendments on this year's ballot must get at least 60 percent of the vote to pass.</p><p>While some local governments have adopted resolutions in opposition to Amendment 4, the County Commission, which approves the budgets for all county agencies, is waiting to see what happens.</p><p>“That amendment, if it passes, will not affect this year's budget,” said County Commissioner Kathy Bryant, the board's vice chairwoman. It “is something we'll discuss at our strategic planning workshop in January and again at our budget workshops in July.”</p><p>Realtors and other advocates maintain that Amendment 4 would boost the state's real estate market and spur the economy.</p><p>Besides offering new homebuyers a “healthy” tax break, the Florida Association of Realtors maintains in its policy statement that the amendment would also protect businesses and homeowners from “unfair and unexpected” tax hikes by ending the “gimmick” known as the recapture rule.</p><p>That was the cap set on property taxes under Save Our Homes and mandated that property taxes could be increased up to 3 percent even as property values fell. The tax increase stops when market values align with assessed values.</p><p>In its analysis, the nonpartisan budget watchdog group Florida TaxWatch estimated that adopting Amendment 4 would over the next decade create nearly 20,000 jobs, expand the state's economy by about $1.1 billion, boost personal income by more than $5.3 billion, and generate between 320,000 and 384,000 additional home sales.</p><p>On the other hand, TaxWatch warned of unintended consequences.</p><p>“Local governments could also increase other revenue sources,” the group's report noted.</p><p>“The magnitude of the reduction in taxable value brought about by the amendment will surely place upward pressure on millage rates, so those not benefiting from the amendment will likely see higher taxes in the future than they would have otherwise.”</p><p>TaxWatch further noted that local governments that do not increase property tax rates to make up for the lost revenue would likely cut other programs.</p><p>Taxpayers statewide could reap an estimated $2 billion in savings over the next four years if Amendment 4 is implemented, the Florida Association of Counties reports.</p><p>Yet the group estimates that longtime homeowners will be forced to pick up the slack, either through higher taxes or reduced services, created by a “back-door bailout” that mostly benefits owners of vacation homes, out-of-state winter residents and high-powered developers.</p><p><i>Contact Bill Thompson at 867-4117 or bill.thompson@starbanner.com</i></p>